Economic and Social Department

 global information and early warning system on food and agriculture

 food outlook
No. 3 Rome, June 2003

Previous pageTable Of ContentsNext page

Highlights

BASIC FACTS OF THE WORLD CEREAL SITUATION

Cereals

FOOD EMERGENCIES PERSIST IN MANY COUNTRIES

Current Production and Crop Prospects

Trade

Carryover Stocks

Large Reduction in World Cereal Stocks

Export Prices

Ocean Freight Rates

Cassava

Oilseeds, Oils and Oilmeals

Pulses

Sugar

Fertilizers

Appendix Tables

STATISTICAL NOTE

Sugar

Late season production increases for 2002/03 may pressure price outlook into new marketing year

Top

The FAO estimate of world sugar production in 2002/03 has been revised upward to account for better than expected late season output in key producing nations. Global production, currently forecast at 145 million tonnes as the 2002/03 cycle winds down, is up an additional 4.2 million tonnes from the November forecast and 10.2 million tonnes over 2001/02. The significant increase over the last crop year is largely attributable to record crops in a number of the world’s largest sugar producing nations.

Although record sugar output in Brazil was largely anticipated by the market, record production in China, India and Thailand may have resulted in more pronounced downward pressure on both near-term and new crop sugar prices. Record production in Thailand, with a forecast 20 percent increase over last year, may result in higher carry-in stocks as results of expansion programmes in that country become increasingly evident. Late season increases were more than offset by declines in the Caribbean, notably in Cuba and Jamaica. Mill closures and policies to diversify agricultural area out of sugarcane production in Cuba resulted in the lowest output recorded since 1912. Adverse weather conditions and irregular rainfall resulted in decreased production in Guatemala and Australia.

World Production and Consumption of Sugar

 ProductionConsumption
 2001/022002/0320022003
 ( million tonnes, raw value.)
WORLD 134.1 138.5 132.7 136.2
Developing countries 94.2 96.8 86.2 89.0
Latin America     
& Caribbean43.045.024.225.0
Africa4.95.07.27.4
Near East5.45.410.510.7
Far East40.541.044.245.8
Oceania0.40.40.10.1
Developed countries 39.9 41.7 46.6 47.2
Europe20.021.519.920.1
of which: EU(16.2)(17.5)(14.7)(14.7)
North America7.47.410.710.8
CIS4.24.410.210.5
Oceania4.84.81.31.3
Others3.63.64.44.4
Source: FAO

Steady price declines since February

Top

Reports of record output in larger producing countries contributed to downward price pressure on the International Sugar Agreement (ISA) daily price, declining from a monthly average of US cents 9 per lb for February to US cents 7.75 per lb for April.

Although additional sugar supplies may continue to pressure prices in the near term, ISA daily prices for the January through April 2003 period averaged US cents 8.29 per lb, or nearly 19 percent higher, than ISA prices over the same period last year, which averaged US cents 6.97 per lb. Current expectations of increased global surplus stocks may result in potentially weaker price levels, but increased domestic utilization of sugar for ethanol blends in Brazil may preclude additional increases in export volumes from that country, and potentially slow additional downward pressure on international prices.

Consumption growth in China was expected to remain strong, despite slowdowns in overall global growth rates, until SARS outbreak.

Top

FAO forecasts world sugar consumption to reach 138 million tonnes in 2003, for an annual growth rate of 1.5 percent, in line with past growth rates, but less than previously forecast. Consumption forecasts continue to indicate that growth in the Far East will continue to be among the most rapid globally, despite economic slowdowns, driven by population growth. Domestic consumption in China, despite the potential for an economic slowdown due to the SARS outbreak, should continue to respond to government efforts to reduce the use of saccharin, sustained low internal prices and increasing consumer preferences for sugar-containing processed foods. Expectations of lower demand pull from Russia, the world’s largest importer, in the remaining months of 2003 have also contributed to uncertainty in regard to more finalized estimates of global import demand. Furthermore, a shifting import policy environment has contributed to this uncertainty.

Previous pageTable Of ContentsNext page

 

 Economic and Social Department

About us

Disclaimer

©FAO, 2003